Six Volkswagen Executives Indicted by Department of Justice

Steph Willems
by Steph Willems
six volkswagen executives indicted by department of justice

The United States has now laid charges against six former or current Volkswagen officials for their role in the diesel emissions scandal.

A federal grand jury in the Eastern District of Michigan returned an indictment today, fingering the execs for playing key roles in a decade-long conspiracy to deceive the U.S. government and public. While five of the men live in Germany, one man — Oliver Schmidt, former head of VW’s regulatory compliance department — was nabbed by the FBI in a Miami airport on Saturday while attempting to return to Germany.

As the charges were handed down, the embattled automaker pleaded guilty to three criminal federal counts and agreed to pay $4.3 billion in criminal and civil penalties.

According to the Department of Justice:

VW is charged with and has agreed to plead guilty to participating in a conspiracy to defraud the United States and VW’s U.S. customers and to violate the Clean Air Act by lying and misleading the EPA and U.S. customers about whether certain VW, Audi and Porsche branded diesel vehicles complied with U.S. emissions standards, using cheating software to circumvent the U.S. testing process and concealing material facts about its cheating from U.S. regulators. VW is also charged with obstruction of justice for destroying documents related to the scheme, and with a separate crime of importing these cars into the U.S. by means of false statements about the vehicles’ compliance with emissions limits.

The steep price tag includes $2.8 billion in criminal fines, plus another $1.5 billion in civil penalties. This, plus the 2.0-liter diesel engine settlement, pushes the cost of VW’s emissions scandal to about $20 billion in the U.S. alone. Further costs — including a 3.0-liter settlement and various lawsuits — should land in the coming months.

Part of the guilty plea includes agreeing to a probationary period of three years, while accepting a DOJ-appointed overseer for that period.

The executives charged are Heinz-Jakob Neusser, 56; Jens Hadler, 50; Richard Dorenkamp, 68; Bernd Gottweis, 69; Oliver Schmidt, 48; and Jürgen Peter, 59. All six face charges of conspiracy to defraud the U.S. and VW’s customers, and violate the Clean Air Act.

Dorenkamp, Neusser, Schmidt and Peter face a further charge of violating the Clean Air Act, while Neusser, Gottweis, Schmidt and Peter face charges of wire fraud.

“Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection and financial laws,” said Attorney General Loretta Lynch in a statement.

While the charges are new, each of the six men were impacted by the scandal in various ways. Heinz-Jakob Neusser, former head of powertrain development and board member, was axed in September 2015, shortly after the scandal broke.

Hadler held the powertrain position before Neusser, and was present for the launch of the defeat device-equipped TDI engines in 2008. He has since resigned from the company.

Dorenkamp is a former head of technical development for the automaker’ lowest-emission engines, and led the team of engineers that created the U.S.-bound 2.0-liter TDI engine.

Gottweis oversaw crisis prevention, and is said to have penned the infamous internal memo former CEO Martin Winterkorn may or may not have seen over a year before the scandal broke.

Peter served as a regulatory liaison, working in VW’s Quality Management and Product Safety Group.

The scandal has led to the buyback or fix of 475,000 emissions-cheating 2.0-liter vehicles in the U.S., and the looming buyback or fix of about 83,000 3.0-liter vehicles. According to the DOJ, the plan was hatched in 2006.

“When the co-conspirators realized that they could not design a diesel engine that would both meet the stricter NOx emissions standards and attract sufficient customer demand in the U.S. market, they decided they would use a software function to cheat standard U.S. emissions tests,” the department stated.

Once the men allegedly decided to use the defeat device to fool regulators, it was full speed ahead. Each of the six had a role to play in pulling off the deception.

Again, from the Justice Department:

Disagreements over the direction of the project were articulated at a meeting over which Hadler presided, and which Dorenkamp attended. Hadler authorized Dorenkamp to proceed with the project knowing that only the use of the defeat device software would enable VW diesel vehicles to pass U.S. emissions tests. Starting with the first model year 2009 of VW’s new “clean diesel” engine through model year 2016, Dorenkamp, Neusser, Hadler and their co-conspirators installed, or caused to be installed, the defeat device software into the vehicles imported and sold in the United States. In order to sell their “clean diesel” vehicles in the United States, the co-conspirators lied to the EPA about the existence of their test-cheating software, hiding it from the EPA, CARB, VW customers and the U.S. public. Dorenkamp, Neusser, Hadler, Gottweis, Schmidt, Peter and their co-conspirators then marketed, and caused to be marketed, VW diesel vehicles to the U.S. public as “clean diesel” and environmentally-friendly.

Germany isn’t known for extraditing its citizens to face charges in other countries, though it could make an exception in this high-profile case. There’s also the possibility German authorities could decide to prosecute the men in their own country.

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5 of 30 comments
  • Pricha33 Pricha33 on Jan 12, 2017

    Everyone keeps glossing over the fact this was only a crime because some board of unelected officials convince d the lawmakers that we must have lower NOx levels that small diesels will be hard pressed to meet without expensive emissions equipment that will lower demand. What a coincidence that no domestic manufacturers were even trying for that market.Yes VW cheated the law, and these guys would be smart to avoid US soil.

    • See 2 previous
    • 05lgt 05lgt on Jan 13, 2017

      "Exposure to NOx was significantly associated with mortality owing to respiratory diseases: relative risk (RR)=1.035 (95% confidence interval [CI]: 1.008-1.063) for lag 2, RR=1.064 (95%CI: 1.017-1.112) lag 3, RR=1.055 (95%CI: 1.025-1.085) lag 4, and RR=1.042 (95%CI: 1.010-1.076) lag 5. A 3 µg/m3 reduction in NOx concentration resulted in a decrease of 10-18 percentage points in risk of death caused by respiratory diseases. Even at NOx concentrations below the acceptable standard, there is association with deaths caused by respiratory diseases." Here, I googled it for you. Edit:

  • Lon888 Lon888 on Jan 12, 2017

    Herr Schmidt should have caught a fast boat to Cuba before trying to make a run for the fatherland.

  • MrIcky It's always nice to see a car guy put in charge of cars instead of an accountant. I wish him well and look forward to some entertaining reveals. I think he and Gilles may be the only industry people that I actually enjoy listening to.
  • Master Baiter It doesn't matter whether autonomous vehicles are better or worse drivers than humans. Companies with deep pockets will find themselves sued over incidents like this. Enough lawsuits and the whole business plan collapses. Cheaper to just put a human behind the wheel.
  • MaintenanceCosts How many dogs are wiped out by human drivers annually?Which type of driver wipes out more dogs per mile? Per trip?Without some context there's not much information here.
  • SCE to AUX I hope the higher altitude doesn't harm his zeal or his career.
  • SCE to AUX Probably a fair price. This is a car I can't own, since it's not made for 6'6" people.